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Regeneron Takes Aim at Amgen and Esperion Therapeutics

New data and bargain pricing could reshape the cholesterol treatment market.

Almost one year after competitor Amgen, Inc.(NASDAQ:AMGN) reported that its cholesterol-lowering drug, Repatha, reduced the risk of major adverse cardiac events (MACE), Regeneron Pharmaceuticals (NASDAQ:REGN) and Sanofi(NYSE:SNY) unveiled similarly strong data this week for their cholesterol drug, Praluent.

Praluent not only reduced the risk of major events, including heart attack and stroke, but it also improved all-cause mortality, which is something Repatha didn't achieve in its study. Regeneron Pharmaceuticals plans to leverage this data to increase sales, including significantly reducing Praluent's price to insurers willing to ease reimbursement requirements. The price cut may help Praluent outcompete Repatha, and potentially, it could help Praluent defend itself if Esperion Therapeutics' (NASDAQ:ESPR) bempedoic acid eventually wins FDA approval.

An important win

Cholesterol-lowering statins are among the most commonly prescribed drugs in the United States, but despite their widespread use, the Centers for Disease Control and Prevention report that an estimated 600,000 Americans still die from heart disease every year.

IMAGE SOURCE: GETTY IMAGES.

Statins effectively control elevated LDL-C in many patients, but there are still millions of people who don't respond adequately to them or who are unable to take them because of side effects. It's primarily this tough-to-treat population that Amgen and Regeneron Pharmaceuticals' cholesterol drugs are targeting.

Unlike statins that reduce cholesterol production in the liver by targeting the HMG-CoA reductase enzyme, Praluent and Repatha inhibit the PCSK9 protein that's responsible for breaking down LDL-C receptors in the liver. Since PCSK9 inhibitors work differently from statins, they can be used in addition to statins or as an alternative to them. In clinical trials, adding Repatha and Praluent to statin therapy reduced elevated LDL-C by about an additional 60%. Following that performance, the FDA approved both Repatha and Praluent in 2015 within months of each other.

There's no doubt that PCSK9 inhibitors effectively reduce cholesterol, but that hasn't stopped insurers from creating barriers to access to prevent all but the most stubborn cases. Payers' resistance to reimbursing for this class of drugs, however, began to ease after Amgen reported results from Repatha's cardiovascular outcomes study in March 2017.

Repatha didn't meet the cut-off for a statistically significant improvement in all-cause mortality in this trial, but it did cut the risk of hospitalization for unstable angina, coronary revascularization, heart attack, stroke, or cardiovascular death by 15%. Also, the risk of heart attack, stroke, and coronary revascularization, specifically, fell by 27%, 21%, and 22% in the study, respectively.

Thanks in part to those results, Repatha's sales increased by 126% year over year to $319 million in 2017. Growing confidence that Praluent's cardiovascular outcomes study would mirror Repatha's contributed to a 68% in Praulent's sales to $195 million.

The gap between Repatha and Praluent's sales, however, could close this year following the release of Praluent's own cardiovascular outcomes data. Specifically, Regeneron and Sanofi announced on March 10 that Praluent also reduced cardiovascular events by 15%. In addition, the study showed that patients with LDL-C that was greater than 100 mg/dL before taking Praluent saw a 29% reduction in risk of death. That finding could lead doctors to favor Praluent over Repatha in high-risk patients.

A price war on deck

Although PCSK9 drugs have won greater use in the past year, pricing remains an obstacle to their use.

Recognizing that headwind, Regeneron and Sanofi submitted their cardiovascular outcomes data to the Institute for Clinical and Economic Review, which analyzes evidence on the effectiveness and value of drugs. The institute's number-crunching determined that the value-based price benchmark price for Praluent in patients with LDL-C at or above 100 mg/dL should be $4,500 to $8,000 per year.

Regeneron says it's willing to negotiate to similar prices if insurers agree to reimburse for Praluent more readily. If insurers agree, the new price would represent significant savings for insurers because PCSK9 inhibitors' list prices are about $14,000 per year. Amgen will probably respond with its own lower prices to maintain market share.

If so, then generally lower prices for PCSK9 inhibitors could establish a moat around their use in tough-to-treat patients, blocking a potential challenge from Esperion Therapeutics. Esperion's bempedoic acid lowers cholesterol by targeting a pathway upstream of statins, and management recently reported that adding bempedoic acid to Zetia in statin-intolerant patients provided an additional 23% benefit in lowering bad cholesterol. Data from four more phase 3 trials of bempedoic acid is expected over the coming months.

It's anyone's guess if bempedoic acid's future results will confirm the data reported so far, but if it does and the FDA approves it, then Esperion Therapeutics wants to position it between statins and PCSK9 inhibitors. One way it had planned on doing that is by offering it at a cost of about $10 per day, or roughly $3,650 per year. Today, that price advantage doesn't look nearly as compelling as it did last week.

A brewing battle

Following Regeneron and Sanofi's news, Esperion Therapeutics' bempedoic acid might not be as competitive in high-risk patients as it might have otherwise been, but a good argument can still be made that bempedoic acid is positioned to be a top seller used in patients below 100 mg/dL. According to the company, there are 9.5 million patients with LDL-C between 70 mg/dL to 130 mg/dL who could benefit from bempedoic acid. Since bempedoic acid is a pill, not an injection like PCSK9s, and Esperion Therapeutics is working on single-pill combinations of Lipitor, the most common statin; bempedoic acid; and Zetia, it could still provide substantial cost savings while also reducing patient burden and increasing patient adherence rates. If so, then the real battle remains between Praluent and Repatha.

Todd Campbell owns shares of Amgen and Esperion Therapeutics. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Author

Todd has been helping buy side portfolio managers as an independent researcher for over a decade. In 2003, Todd founded E.B. Capital Markets, LLC, a research firm providing action oriented ideas to professional investors. Todd has provided insight to a variety of publications, including SmartMoney, Barron's, and CNN/fn.
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